Yongye's Recent Filings Raise Various Red Flags
Investors in Yongye International (YONG) initially cheered the company's 4th quarter results released last week. The company beat expectations on revenues and earnings, and the stock initially traded higher. However, Yongye shares soon reversed, closing last week sharply lower despite the upbeat earnings announcement. Why the dour mood?
Behind the pleasing top-line results lurk several significant problems that raise red flags about the company's operations and profitability. The first of these issues is a seemingly impossible figure reported in Yongye's 10-k released last week:
Sales from Hebei increased 428% period over period in the second half year of 2010 and 111% year over year during the year of 2010.
Sales from Hebei were 20 million in 2008, and 29 million in 2009, and 61 million in 2010. So how could sales have soared 428% in the second-half of 2010 versus the second-half of 2009? It seemed impossible, however further research
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